Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Philippine Bonds Advance as Borrowing Costs Kept at Record Low

Don't Miss Out —
Follow us on:

Jan. 24 (Bloomberg) -- Philippine seven-year bonds advanced, driving the yield to a two-week low, before the central bank announced it was keeping its benchmark interest rate at a record low. The peso was little changed.

Bangko Sentral ng Pilipinas, which released its policy decision after local markets closed, maintained its overnight borrowing rate at 3.5 percent and reduced the rate on special-deposit accounts to curb capital inflows that may create asset-price bubbles, according to a statement in Manila. Separately, a Bloomberg News survey predicts the monetary authority will leave the rate on hold until the third quarter before raising the measure by 25 basis points in the last three months.

“There seems no immediate risk of a rate increase given tame inflation and the upward pressure on the peso,” said Dave Estacio, an assistant vice president at First Metro Investment Corp. in Manila.

The yield on the 3.875 percent bonds due November 2019 fell nine basis points, or 0.09 percentage point, to 4.12 percent, the lowest level since Jan. 10, according to noon fixing prices at Philippine Dealing & Exchange Corp.

Consumer-price gains this year are forecast at 3 percent, central bank Deputy Governor Diwa Guinigundo said today. Inflation averaged 3.2 percent in 2012, compared with the monetary authority’s target of 3 percent to 5 percent, Governor Amando Tetangco said on Jan. 4.

The peso closed at 40.627 per dollar, compared with 40.618 yesterday, prices from Tullett Prebon Plc show. It climbed to 40.550 on Jan. 14, the strongest level since March 2008. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, held at 4 percent.

“Low interest rates are fueling prices of financial assets and pushing resources to non-tradable sectors, especially real estate,” the International Monetary Fund said in a statement yesterday after a Philippine review. The Washington-based institute forecasts growth of 6 percent this year from an estimated 6.5 percent in 2012.

To contact the reporter on this story: Clarissa Batino in Manila at cbatino@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.